Some studies say that 60% of restaurants fail within their first three years of operation and other studies have indicated the number to be as high as 90%. It’s easy to talk about reasons why a restaurant fails — poor leadership, bad location, lack of focus. But what makes a restaurant or group of restaurants successful? At the 19th Annual UCLA Extension Restaurant Industry Conference, a conversation with four successful restaurateurs tackled topics about what makes a compelling restaurant business.

Meet the Panel

Bill Chait: Managing Partner & CEO at Sprout LA, which includes the restaurants Bestia, Republique, Sotto, Picca, Short Order, Petty Cash Taqueria, Redbird and Short Order. Chait has been touted by Los Angeles Magazine for creating Los Angeles’ “most impressive portfolio of restaurants in just under six years.” Chait’s group of restaurants are all separately owned but fall under one umbrella organization. He currently has five restaurants in construction, eight on board, and twelve concepts.

Susan Sarich: Founder and CEO of SusieCakes, LLC. With 14 locations from San Diego to San Francisco, Sarich’s all-American, from-scratch bakeries are based on her grandmother’s recipes. Noticing a lack of places where women could have a career where they didn’t have to sacrifice weekends and nights, she focuses on providing a work-life balance for employees, closing her bakeries at 7 p.m. daily and staying closed on Sundays.

Mike Simms: Managing Member of Simms Restaurant Group, which includes Simmzy’s, Tin Roof, MB Post and Fishing with Dynamite. Born into the restaurant business, Simms started his own project six years ago and currently has more projects in the works. Currently focused on beach cities, Simms celebrates craft in his restaurants.

Robert Spivak: Co-founder, President and CEO of Grill Concepts, Inc., which includes The Grill on the Alley, Daily Grill and Public School. With over 60 years in the business, this legendary restaurateur owns 19 Daily Grills and 7 Alleys on the Grill around the country. After a failed retirement eight years ago, he launched the new modern gastropub concept Public School, which focuses on education in the art of food and beer.

Tip No. 1: Support local.

From local ingredients to supporting local businesses, local seems to be a key to the success of these businesses. Simms’ restaurants and Spivak’s Public School both promote local craft breweries. Sarich’s bakeries define local as being part of a community where the bakery is at the heart of neighborhoods where people come to buy cakes for celebrations. Simms’ restaurants are also community spots where neighbors can gather and enjoy good food and drink. And Chait defines the term “local” as a religion in his business, as each restaurant is a collaborative project. Each object in the restaurant — from the chairs to the lighting — comes from local designers, and these same vendors are their customers as well.

Tip No. 2: Create room for growth, especially in the kitchen.

The Chef is an integral part of a restaurant. And at places like SusieCakes and the Daily Grill, chefs are homegrown. At SusieCakes, many of the pastry chefs come to the bakery right out of pastry schools and develop within the company. At the Daily Grill and the Grill on the Alley, chefs work their way up through the kitchen.

But Simms and Chait each approach their restaurants differently. Their chefs have more creative freedom within the concept. According to Chait, who currently has 15 chef partnerships, each one is very collaborative and independent. The chefs own 15-45% of the restaurant they are in, making them lifetime partners with lots of growth potential.

Tip No. 3: Know your numbers and communicate them with your staff.

While technology has streamlined many systems and reports, it also provides an excess of information. Simms suggests looking at a report if you are going to take action. He takes a quick look in the mornings, but has instituted an old-fashioned dry-erase board where the staff can share information resulting in fast intake in the back of house. Sarich agrees, and thinks that reading the online manager’s log tells more than numbers do. The key is communication among the staff.

Tip No. 4: Listen to your customers, even if it’s not what you want to hear.

In discussing the topic of social media, the entire panel agreed that is it important to respond to everything. No matter the outlet, they listen to what customers have to say and don’t make excuses.

Tip No. 5: Appreciate the value of your staff.

Wages is a hot topic and there was a consensus that the restaurant model was not built to pay wages that are necessarily socially responsible.

“The whole business model that restaurant businesses have run on in urban areas is changing, irrespective of minimum wage,” said Chait. “We are dealing with crazy wage inequity and it’s a bad system.”

We see restaurants starting to include automatic service fees and this is just the start.

The panelists barely scratched the surface on this hot topic of wage inequity, but they all agreed that it is time for total compensation.

Their forward-thinking, socially responsible attitudes are a key reason for their successes today.

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